Here’s why Facebook’s investors find Facebook so baffling

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Judging by the questions at Facebook’s first annual shareholder meeting yesterday, its investors are unhappy with its stock price, frustrated with its features… and just baffled by Facebook generally.

One shareholder complained that “there’s more junk coming through in your newsfeed and it’s hard to connect with your peers.” Another said he just cannot understand its privacy settings anymore. Twisting the knife, he added that the Facebook mobile app isn’t very friendly. And a third suggested that “it would be very useful, especially for older, technologically less inclined people, if there were a way we could call Facebook if there were a problem.” Later, someone wanted to know what Facebook was going to do about all the hackers inside the company. CEO Mark Zuckerberg calmly explained the definition of “hackers.”

Their biggest concern, naturally, was the share price, which has never risen above $38, the price at which it debuted in May last year. That was “kind of a theme of the meeting,” Zuckerberg admitted.

Yet while its stock performance may be abysmal and its profits slim, Facebook is investing in long-term growth. Recent rumors suggest it may even find its way into America’s pre-eminent market index. All Zuckerberg needs to do, we have argued, is to be more like Jeff Bezos of Amazon, another company famous for aggressive expansion with razor-thin profits, and talk to his shareholders about how revenue is up in mobile, about investments in emerging markets, about new advertising mechanisms—essentially about all the cool stuff Facebook is doing to secure its future.

So why hasn’t Zuckerberg been able to make that case? Judging by yesterday’s meeting, it seems clear that is a fruitless pursuit. Investors are not going to figure out what Facebook has planned when they can barely figure out what Facebook is now.

Many said they bought the stock on the advice of their family.”I have more than 8,000 shares. I have heard about Facebook. I don’t know how to use Facebook but I own stock,” said a woman whose son encouraged her to buy shares. The man with the question about hackers told Zuckerberg that he “invested blindly” because “my family is a big fan of yours.”

One shareholder summed up the confusion with a simple question: How many people above 40 work at Facebook? Chief operating officer Sheryl Sandberg didn’t offer a number but reassured him that there were many. Yet that helps explain why Facebook has such a tough time connecting with its shareholders—and indeed with its users. About two-thirds of Facebook’s users are now over 35. The average age of a Facebook user has climbed to 41. The average age of a Facebook employee is 31.